Gold Trading Japanese Candlesticks
XAUUSD with Candle
Brief History
Candlesticks were created in the 18th century by the legendary rice trader called Homma Munehisa to give overview of opening, high, low and closing market price over a specified time period.
They were used by the legendary rice trader for predicting future market prices. After dominating in the rice market, Munehisa after that he eventually moved and went to the Tokyo Exchange where he gained huge fortunes using this analysis method. He's said to have made more than a 100 consecutive winning trades.
Types of charts
There are 3 types of charts that are used in XAUUSD: Line, bar & candlesticks.
Line - draws a continuous line joining closing prices of gold.
Bars - highlighted as sequence of O-H-C-L bars. OHCL represents OPEN HIGH LOW & CLOSE. Opening price is highlighted as a horizontal hyphen to the left and closing market price as a horizontal hyphen to the right side.
The main disadvantage of bar charts is that they aren't visually appealing and identifiable, henceforth most traders do not use them.
Candles Patterns - Japanese Candle Charting Techniques - these use the same price info as bar charts (open, high, low, & close). However, they're represented in a much more easily identifiable way that resembles a candlestick which has wicks on both ends.
How to Interpret/Analyze Japanese Candlestick Charting Techniques
The rectangle part section is referred to as the body.
The high and low are referred to as shadows & drawn as poking and protruding lines.
The colour is either blue or red
- (Blue or Green Color) - Prices went up
- (Red Color) - Prices headed downward
Most platforms such as the MetaTrader 4, use colours to mark direction. Colours used are blue or green: when price moves upwards, red: when price heads down.
Candles Vs. Bar Chart
When candles are used it's very easy to see if price headed up/down as compared to when bar charts are used.
The Japanese Candlestick Charting Methods also have many trade formations which are used by Gold traders to trade the markets. Japanese Candle Charting Methods - candles patterns have different analysis interpretation & the most common Japanese Candle Charting Techniques are:
The above Japanese Candlestick Charting Techniques and Patterns is what makes the Japanese candles popular among trade technical traders and it's why this type of analysis are most commonly used when it comes to analyzing the market. The analysis for these Japanese candle-sticks formations and setups in trade is the same as that one used in stocks trading - Japanese Candle Charting Techniques.
Drawing japanese Candles Charts on MetaTrader 4 Platform
To draw these on the MT4, select the MT4 charts drawing tools within the "MetaTrader 4 Tool-bar" - shown below.
To view this tool-bar on MT4 go to 'View' Next to file tab at top-left corner of MetaTrader 4 Platform, Press 'View', Then Click 'Toolbars', Then tick the 'Charts' Button. Above tool-bar will appear.
Once the above tool bar, pops up you can then select and choose the type you as a trader want to convert to, If you as a trader want to view using the bar format, click the bar tool button like illustrated above, for line format press the line tool button, for Japanese candles format click "candlesticks tool button".
Gold Trading Japanese Candlesticks. Japanese Candles Candle Sticks Setups - Gold Using Candlesticks. Trading with Candle - Trade with XAUUSD Candle Pattern
Get More Tutorials & Topics:
- MetaTrader 4 Charts Objects List on MetaTrader 4 Charts Menu
- Trading with Short-term & Long term XAUUSD MAs XAU USD Strategies
- How to Install MT4 Software for PC
- How to Calculate StopLoss Order in Trading
- Gold Methods on Different XAU USD Chart Timeframes
- How Do You Read Bollinger Band Width Indicator?
